 taxi1
Everyone knew the $100M payment was coming, they just didn't know when.
I've actually bought 2 more small parcels of shares today, which I'm now realising I shouldn't have done. As doing so most likely doesn't help with the outcome I'm currently looking for.
I won't be buying any more until after the circular is published ( probably tomorrow or Monday) as that will contain the share consolidation ratio.
Now they may have already agreed on the ratio based on yesterday's or tuesday's share price & I hope that's the case, otherwise it will be on today's closing price or friday's one.
And I would like that to be as low as possible even although it will increase my on paper losses in the meantime.
I'm looking at the longer term outcome once the special dividend is paid & the share buy-back complete's & yes I want as few shares in issue going forward as possible because that means fewer shares for future revenue to be distributed between, thus higher dividends & earning per share.
I'll reluctantly take 2 new shares for every 3 currently ratio which would take us to roughly 95M shares & the buy-back might take another 4M off that number eventually.
I'd be even happier if the ratio is 19 for every 30 currently held as that takes the number down to roughly 90.5M shares. Or 37 for every 60 as that makes it just over 88M shares.
LOTM |
The div payments already factored in to the price already
This will drop like a stone when div payment comes
Then they buy the rest of the buyback at the low price
Been here before we always get shafted
Hope I’m wrong |
Wow I wasn't expecting the $100M dividend (56p per share) to be paid out as quickly as 20th October with an Ex-Div date of 5th October.
The rest of the share buy-back is to be completed by the end of December, so they'll have to get a move on with that now.
Happy as Larry with both of the above especially the share consolidation being confirmed. Just wish it was happening at the close of business yesterday, because that would reduce the number of shares in issue by 1/3 so we'd be looking at under 100M shares in issue with the buy-back to reduce it even more !
Now with this dividend on offer there will be a move to push the share price higher thus reducing the consolidation ratio :(
LOTM |
churchill2,
hmm I'd say worrying is more like it, been here to often in the past.
Hopefully things will turn out alright this time round !
fingers crossed etc
But seriously Capricorn is currently valued at under $280M. Net Cash alone was $191M at the end of May. Then you have receivables due of $145M less payables of $65M to add on, on top of that.
So basically the business is currently being given a negative value !
Because those numbers don't include the future contingent consideration due from Waldorf of over $100M (from there calculations not mine) less another $25M due to Shell in 2024.
LOTM |
Hi LOTM
Should be an interesting day tomorrow. Trying to make sense of the numbers that can be so variable is the proverbial minefield. It could go 20p either way. |
I topped up yet another 5,250 at 155.17p but its not showing up on the LSE yet so either there delaying it or it was done on another platform.
LOTM |
Not entirely sure how I missed these, but these were updates from the AGM statements
· Identifying and actioning a significant reduction in G&A to right-size the overhead to the continuing business. We have achieved an initial gross G&A reduction of at least US$35m on a run rate basis with opportunities for further meaningful cost savings being pursued. We will update shareholders on the scale of further cost reductions at our half year results in September, but we believe it will be possible to reduce annual gross G&A to US$1.50/boe or less;
Year to date production to the end of May has averaged 31,500 boepd (split 14,000 bopd and 98 mmcfpd). Our full year working interest production guidance remains 32,000-36,000 boepd and we expect an uplift in production in the second half of the year to achieve this. At the end of May we had US$317m cash (net cash US$191m after debt of US$126m), US$145m trade receivables in Egypt (US$104m is overdue) and US$65m of trade payables and accruals. *
Since the results announcement, Capricorn, with its partner, has sustained a five-rig development drilling program in Egypt, focused on the oil-rich BED area. Eight producer and water injector wells have been drilled this year in the BED 15/16 area, following seven successful wells drilled in the area in 2022, extending field limits and reserves. A well in the Karam Field in the AESW concession tested in May at rates of up to 4,600 bopd, the highest flowrates encountered in a Capricorn well to date. Production is on track to grow in the second half of the year.
So lets go through them .........
To get to a G&A cost of $1.50 boe would be some achievement, even if they were referring to that as a WI number ( @$3.40 net to our share) it would still be a remarkable achievement compared to the figures I posted earlier. |
Even with the health profit margin we're currently enjoying of rough $40 a barrel ($89+ for Egypt oil - $49.83 of OPEX, deferred payment & G&A) & gradually increasing production, that level of income will no-where near cover the amount of money being invested in the ground this year in Egypt ($120M).
2024 will be the inflection point.
If production starts the year at roughly 7,000 bopd & the oil price maintains its current level. Then we should be seeing a healthy margin of over $50 a barrel ( $88 - $36.05 ($13.00 + $9.60 +$13.45) )
That equates to over $350,000 net per day.
If development capital is set around $80M for 2024, that equates to $6.66M a month or roughly $220,000 per day. Even if they went as high as $120M again that still comes in at roughly $330,000 per day.
So we would be doing better than break-even from day 1 & as production continues to increase gradually during the rest of the year, we would be able to bank more & more cash daily (assuming the oil price was constant which it won't be).
Even taking the daily margin at $20,000 that works out at $7.3M for the year, then add in the nat gas for another $3.5M & you're looking at over $10M that can be distributed in dividends. By then we should be down to under 110M shares in issue so close to a dividend of $0.10 per share, plus the distribution from the Waldorf assets in late March which is likely to be in the region of $50M. Lets say they use $20M for additional share buy-backs & pay out the other $30M. That would mean a total dividend for 2024 of close to $0.40 a share !!!
LOTM |
So where is the current break-even point for Capricorn if we leave nat gas production to make that tiny profit per day ?
OPEX is $13.00 per barrel.
The extra deferred consideration payment to Shell of $25M that will need to be paid in Q1 2024 for the Egypt assets.
So you can say its just over $2M per month, or on a per barrel basis its $11.41 ($25M / 2.19M) assuming production for the year averages the 6,000 bopd they projected.
Please note production is very much biased to the 2nd half of the year so if you split the $25M in 2 & assign $12.5M to each half of the year & then divide that by the production for that half year my estimate is that the cost was around $13.80 in the 1st half.
G&A cost next
Total is expected to be around $70M for 2023 falling to just $35M next year (which is something people really need to grasp going forward).
Again you can either assign it per month $5.83M or by a barrel $31.96 (ouch) & again if you want to weight it to the production profile it was probably around $38.80 in the 1st half of the year.
Just as an aside looking ahead if we were to say production was 6,000 bopd in Jan 2024 (the average expected for 2023) then the G&A cost for that month works out at just $15.68 per barrel & if its 7,000 which is where I expect it to be if not higher then the figure falls to $13.45 per barrel.
So for the 1st half of 2023 we're looking at costs of $13.00 + $13.80 + $38.80 = $65.60 per barrel.
For the year as a whole $13.00 + $11.41 + $31.96 = $56.37 per barrel
For the 2nd half of 2023 approximately $13.00 + $9.70 + $27.13 = $49.83 per barrel
As you can clearly see there isn't a lot of profit margin between $77.75 (the average price of our Egypt oil in the 1st half of 2023) & our costs of $65.60 per barrel.
And that's before you write of the cost of the Mexico well $30M (which wipes out another $13.50+) or take account of the $120M of drilling in Egypt for 2023.
LOTM
Sorry I've made an error in the above I need to re-do the calculation later as I've assigned all costs to oil & some need to go to the nat gas side of things |
controlledmadness,
Yes Bank of America Securities were carrying out the buy-back with the last announcement regarding it issued on 4th August, with something like $12M+ left to be spent of the $25M minimum buy-back amount.
Bank of America (& Merrill Lynch which is part of the company) made there 1st official major share holding declaration to the market on 15th August.
They passed a notifiable threshold on 14th August.
They owned 1.949898% of the shares directly & had voting rights over an additional
7.539843% of the company, for a total of 9.489741% as of that date (or 13,554,847 shares).
Previous to that date they had no notifiable interest in the company's shares (so less than 3% in total for sure, but the document kind of indicates they didn't have any shareholding at all).
Since then they have gone on to increase there actual holding of shares owned (it had risen to 3.58% by 25th August see company website & major shareholders list) only for it to then drop to just 0.333209% on 4th Sept (see 5th Sept announcement).
However the general trend that is clear through all these Bank of America & Goldman Sach's announcements is that they are building up significant voting rights in the company through various means.
Goldman Sach's currently have voting rights to 17,522,049 shares or 12.267% of the company & Bank of America 15,026,769 shares or 10.52% of the company.
----------------------------
And yes the reason the buy-back is not currently active (when it should be filling its boots with cheap stock) could well be a conflict of interest for Bank of America.
I hope we get to the bottom of it on Thursday during the Webcast & the company comes up with another broker who can do the buy-back instead because the current situation is not in existing shareholders best interest's.
LOTM |
Isnt Bank of America supposed to be buying shares in the buy back.
They have not been active for a month. |
churchill2
I'm not expecting great numbers, because its nearly impossible to have them given what we already know.
Expenditure in the 1st half of this year was extremely high (excluding the $449M special dividend).
Production was in gradual decline & that would have continued until probably late March before the 1st of the new wells came on stream.
The 1st half loss will be substantial.
Capricorn won't even break even for the year, even with these rising oil prices & increasing production.
2024 is a completely different story, Goldman Sach's & Bank of America see what's coming & are accumulating voting rights, right left & centre shaking out the weak holders.
Private Investors are going to wake up to this to late ......
Capricorn is going to be a cash-cow, because of all the money that's been invested in the ground.
LOTM |
The current share price does not generate any confidence in me that the numbers on Thursday will be positive. I hope I am wrong. |
I wasn't intending to buy any more shares, especially ahead of the half year results & webcast on Thursday.
However given the silly price they were just offering I just bought another 6,750 shares.
Maybe someone isn't watching the price of oil & the direction its being going for the past 6 weeks!
$$$$$$$ in the bank daily
LOTM |
Well so far in Sept the price of Brent oil has averaged roughly $90 a barrel which means the company is receiving roughly $88 a barrel in Egypt.
We should be producing a net amount north of 5,500 bopd by this stage, possibly getting close to 6,000 net bopd. However I'll use the lower number for now.
So revenue earned over the last 10 days is $4.84M (10*88*5500) less OPEX of $0.715M
(10 x $6 per barrel to be safe x 2.1685 (the ratio of our share of production compared to the WI costs that we need to cover).
Therefore we've made over $4M in those 10 days with only really G&A costs to come off that figure in cash term & an allowance for Depreciation & Amort of the asset from "finding" it cost.
In oil terms our true OPEX costs are around $13 per barrel & we are currently making around $400,000 a day net.
The Nat Gas terms seem to be slightly different as the cost ratio works out at 2.6992 (call it 2.7) on the figures the company presentations give.
So on production of 7300 boepd we're getting revenue of around $118,500 a day (5.6*$2.90*7300) with OPEX costs of $108,405 ($5.5*7300*2.7). A mere $10,000 a day profit unless the price of gas is index linked to inflation since last year.
Certainly not worth the effort in monetary terms that's for sure, but they do get some liquids production with the gas & some gas will be used for power production etc.
That explains precisely why they are targeting liquids production.
LOTM |
churchill2,
No problem :)
I've tried to be on the safe side & hopefully I am.
Yes they & us might get very lucky with the oil price over the next 6 month's. That coupled with hopefully rising production is exactly what your wanting.
I hope they start being much more informative regarding all this drilling that's taking place.
We've only had a tiny snippet so far, 1 failed exploration well which cost under $3M. 1 development well that was fractionally worse than the pre-drill numbers. 1 that was maybe 20% better than expected, one 50% better than expected & one probably 100% better.
Not much to go on.
LOTM |
In case anyone is wondering where the hefty $203M came from, $25M to Shell for the max earn-out on the Egypt assets, $13M for the share buy-back, $40M G&A expenses, given that they will likely have to front load some of the severance payoffs to staff, $30M for the Mexico exploration well, $60M for D&P drilling in Egypt ( half the expected amount for the year there) & finally $35M in OPEX costs.
I've got the 2nd half at $140M (assuming they spend the other $12M+ on the share buy-back during that period) which doesn't include the next special payment to shareholders.
So I've basically got the 2nd half of this year kind of neutral, with that $140M of expenditure matched with around the same sort of level of cash inflow from Egypt.
Now some might think that's not a great outcome, but there failing to see the turnaround that will occur in 2024. When that $340M of expenditure is immediately cut by $90M ($35M from G&A, $30M non Egypt exploration & $25M share buy-back).
On top of that your production levels are much higher than they are now, so I'd expect next years exploration, development & production expenditure to be lower, maybe in the $80-100M range. So that would be another $20 - 40M to take off this years expenditure number. While at the same time revenue from Egypt is far higher, especially in the 1st half of 2024 than it was this year. Plus we'll be getting a healthy payment from Waldorf as well at the end of Q1 2024.
To put all of that in context, Capricorn is investing around 33% of its market cap (£0.60) in just 1 year into Egypt. Which is a huge investment.
If they are able to pay the $100M special dividend later this year & do the share consolidation at the same time, There will only be around 100 - 110M shares left in issue, which is tiny.
Next year 2024, G&A costs will fall by around $0.30 - 0.35 per share on that basis.
The Waldorf payment at say $50M would equate to $0.45 - 0.50 a share alone.
The $80-100M estimate of investment next year is another eye watering amount, & yet production will still be on the rise & we will be banking eye watering sums on a daily basis to quickly offset it. At current oil prices we'd be looking at 7,000 Bopd bringing in a net $0.5M per day ! ($616,000 revenue less $90,000 of OPEX) on 1st of Jan 2024.
LOTM |
IOTM
Thanks for the effort you are putting in. I must confess that my attempts to work out a credible financial position have failed miserably. I may be clutching at straws but Capricorn paid $323 for Egypt so if they can improve performance I.E Randy and the oil price holds up then who knows? |
Share Register has now been updated on the company website to the positions as of 25th August 2023.
We knew about the drop in the Madison holding through an earlier "holdings announcement".
What we didn't know is that Irenic Capital reduced its holding between 11th & 25th August by 912,716 shares.
The other noticeable change is that ABRDN no longer hold above 3% of the company, they previous held 4,543,990 shares (3.18%) we have no way of knowing whether they sold all of it or part of it.
BoA (Merrill Lynch) appear on the list now but only for 5,118,047 shares which is a far cry from there current voting right holding of over 15M shares.
LOTM |
I've been crunching some numbers ahead of the half year report.
There estimate for 2023 production in Egypt is for an average of 6,000 bopd & 7,021 boe in nat gas.
The 2022 actual numbers were 5,028 bopd & 7,941 boe in nat gas.
Given production was on a decline throughout 2022, that decline would have continued probably until the start of the 2nd quarter when the 1st of the new development wells would probably have come online, which would have stabilised the rate before it started to increase as more & more wells are added in.
Therefore I don't think oil production will have averaged above 4,750 bopd during the 1st half of the year. Or around 860,000 BO in total.
Average price of Brent for the 1st half was $79.75 & therefore the realised price in Egypt is thus around $77.75
So gross oil revenue for the 1st half should be around $66.5M with an additional $12M from nat gas.
I've estimated total outgoings to be a hefty sum of around $203M for the 1st half plus the $449M that was paid as a special dividend to shareholders.
So we should be looking at a net cash balance of around $157M assuming receivables due $97M & overdue amounts of $66M are roughly unchanged from the end of December.
I am being conservative in the above numbers so hopefully the actual results top these numbers.
Right now we should be entering a fantastic scenario where rising production and increasing oil prices are really increasing daily revenue substantially.
Oil revenue in the 1st half was around $360,000 gross per day on average. Today its probably around $460,000 & if the price of oil remained constant it would be north of $560,000 in late December (possibly close to $600,000 even).
All of which makes a massive difference to the bottom line.
LOTM |
LOTM
Sorry agin another week to wait |
taxi1
No
They postponed the results from the 7th Sept (see announcement on 21st July) its now 14th Sept for the results announcement with a webcast at 9am that day to.
LOTM |
Sorry half year results on the 7th of September
The company strategic plan is on the 14th it’s in the AGM statement |
Think half yearly results out tomorrow
We may see more of what’s happening and why |
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